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Factors that hurt GDP temporary- IHS's Behravesh

Nariman Behravesh, Chief Economist at IHS Global Insight expects growth to come back in the second and third quarter, as the economy moves past temporary hurdles like weather and the port strike.

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The US economy shall rock in the first quarter hit by a lower corporate profits higher imports and a smaller inventory build. But many economists are confident we're gonna see a rebound this quarter that includes. I HS chief economist married man Barnett joins us have great to have you sir. I so let's look at every contact with your take on it. Well let's remember that we had a very similar number last year contract two point 1% in the first quarter. 2014. And then bounced right back. In subsequent quarters will probably get a very similar pattern. This year. A number of factors. That. Pulled down in the first quarter temporary including bad weather and the doc strikes on the West Coast which totally interrupted. Trade patterns so so those are going to went and got away basically so we would expect growth in the second quarter to come back around 2%. And by the third quarter made Europe 3%. And you talk about a lot of these sort of transitional things the Fed talks about that a lot to does this mean that. Planned for rate hikes remains on track. I think I wanna have to say so far yes but of course a lot of the I'm not now the jobs numbers do. It's him in the next few months. Obviously you know things like retail sales and and so on but I think all indications are that growth in the US the underlying growth in the process they'll pretty solid. What are the wrinkles in a second our economic recovery is really the strong dollar you talk about the impact that's having. And whether or not you're concerned going forward if we continue to see this broader trend. Well certainly the strong dollar is a major headwind for US exporters. And also for US companies earning profits. Overseas in fact of the profits numbers the first quarter were terrible and some of that was because of a strong dollar so it is an issue. But it's not going to be a recovery Keller you alas is not that export dependent. Exports are only 13% of GDP. Compared with consumer spending which is 68% of GDP so it's a problem but it's not a huge. And you are optimistic about consumer spending how important is back to get beacons are back on track. The consumer is crucial to the US economy. 68%. Of GDP has accounted for records are responding. We think that this quarter second quarter consumer spending is gonna hear it would have percent three two and a half percent two point 6% growth. So from that perspective. Solid growth we'd love it to be ire of course but it that is probably Amtrak to go up to about 3%. By the third and fourth quarters so it's crucial that the consumer remain upbeat says that war I the consumer continue to spend and and so far so good when asked site. There were clearly some disruptions. To consumer spending in the first quarter because of the bad weather but those seem to be behind them. And in fact we did get new data on consumer confidence here from the University of Michigan today. When he thinks some traction at least the back half of making you talk about that number. I think at consumer confidence has been mostly up over the last year but recently has come down a little bit. A variety of factors there having to do with the fact that gasoline prices for example start to move back up again so. Consumers aren't euphoric as they were say six months ago when gasoline prices go way way right now. So I think that and the bad weather has played as well no question. Odds are a variety of factors that have brought confidence down from. Fairly high levels. And at one point few months ago confidence with the highest in south south. So for it to have come down last couple month I don't use a serious issue. Aaron it's still an optimist thank you so much now and then. I think an Iron Man bad matchup I test global insight and Bobbi Rebell this is writers.

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